Indonesia is included in the US priority group, a number of products have the opportunity to receive tariff relief

PARIS - Indonesia has the opportunity to receive tariff relief from the United States after it was judged to have made progress in enforcing labor regulations, especially regarding the handling of forced labor practices.

This was conveyed in a bilateral meeting between Coordinating Minister for Economic Affairs (Menko) Airlangga Hartarto and the United States Trade Representative (USTR) on the sidelines of the 2026 OECD Ministerial Meeting in Paris.

Indonesia is in the Good Group group with Canada, the European Union, Mexico, Ecuador, and Pakistan. Of the approximately 60 countries that are of concern to the US in terms of employment and trade issues, only six countries have obtained this status.

According to the Coordinating Ministry for Economic Affairs, one of the factors that received a positive assessment was the issuance of Permendag Number 9 of 2026 which prohibits the import of forced labor products.

Indonesia and the United States have also agreed on an Agreement of Reciprocal Trade (ART) or a Reciprocal Trade Agreement.

As a follow-up, the USTR plans to grant 18 requests for tariff exemptions or product exclusions submitted by Indonesia in the Section 301 investigation scheme of the US Trade Act.

Coordinating Minister for the Economy Airlangga Hartarto in an official statement from the Coordinating Ministry for the Economy, quoted on Friday, June 5, said the plan to exempt the tariff showed international confidence in Indonesia's efforts to overcome obstacles in trade and investment.

According to Airlangga, this policy has the potential to reduce the cost of exporting Indonesian products to the United States market and increase the competitiveness of national industries.

Indonesia also obtained a 10 percent tariff in the results of the Section 301 investigation with five other countries. Meanwhile, 54 other countries were subject to a higher tariff, namely 12.5 percent.

However, the benefits of the tariff exemption have not yet come into effect. Its implementation is expected to be carried out only after July 24, 2026, after the period of application of the global tariff is completed.

The scheduling was made to avoid overlapping with the 10 percent tariff that is still in effect, as well as to adjust internal legal processes in the United States.

Despite receiving a positive response, there are still a number of issues that must be resolved by both countries.

The US government highlighted changes in import procedures in Indonesia, especially the import licensing system which is considered to affect the entry of a number of US agricultural products such as apples, grapes, beef, pork, corn, and soybeans.

Washington hopes that the policy can be coordinated with Indonesia's accession process to the OECD (Organization for Economic Co-operation and Development) or the Organization for Economic Cooperation and Development.

On the other hand, Indonesia is fighting to ensure that the export of copper cathodes produced by Freeport-McMoRan in Indonesia is exempt from the Section 232 tariff, which is an AS tariff policy related to strategic industries and national security.

Both countries agreed to strengthen coordination to resolve remaining trade barriers. Discussions also include accelerating communication of WTO agreements related to fisheries subsidies while taking into account national interests.

The government assesses that the plan to exempt the tariff can provide stimulus for the national industry, reduce export costs, and increase the competitiveness of Indonesian products in the United States market.